Question

Last month, Ginger's hotel ran an occupancy rate of 85%. Her competitive set had 150,000 room nights included within it that were available for sale during that month. During that month, the competitive set sold a total of 115,000 rooms. What was the approximate occupancy rate INDEX last month for Ginger's hotel? It's one of the following answer; 78%, 92%, 87% or 39%? Provide details.

Answer 1

Given Information:

Occupancy rate of Ginger’s hotel = 85%

Competitive set available rooms = 150,000

Competitive set sold rooms = 115,000

Required Information:

Occupancy rate INDEX = ?

Answer:

Occupancy rate INDEX = 111%

Step-by-step explanation:

The occupancy rate INDEX is given by

Occupancy rate INDEX = Occupancy rate of Ginger’s hotel/Occupancy  rate of competitive set

We are given the occupancy rate of Ginger’s hotel so we need to first find out occupancy  rate of competitive set which is given by

Occupancy rate of competitive set = Competitive set sold rooms/Competitive set available rooms

Occupancy rate of competitive set = 115,000/150,000

Occupancy rate of competitive set = 0.7667

Occupancy rate of competitive set ≈ 76.67%

Finally, we can now find the occupancy rate INDEX

Occupancy rate INDEX = Occupancy rate of Ginger’s hotel/Occupancy rate of competitive set

Occupancy rate INDEX = 85/76.67

Occupancy rate INDEX = 1.108

Occupancy rate INDEX = 110.8%

Occupancy rate INDEX ≈ 111%

Therefore, the approximate occupancy rate INDEX last month for Ginger's hotel is 111%